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Old 02-26-2017, 04:32 PM
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Question about Form 982

I received a 1099-C recently for a debt (student loan) that was cancelled in 2013. It was "corrected due to an error" on December 6, 2016. I was using H&R Block software so I used their advisors to try to understand the situation. When I sent the advisor my transcript of my past return for the year the debt was discharged (2013,) they told me that the discharge was not listed on it. I was told that since it was corrected in December 2016 that I should file it on this year's tax return to avoid any penalties/fees. I was advised to claim insolvency by using the Insolvency Worksheet (and to use the corrected date of 12/6/2016 to figure out my FMV, etc.). I am insolvent enough to exclude the entirety of the cancelled debt. But now I am stuck on Form 982. I filled out line 1b and line 2 but do not know what to do after those two lines?

Is Line 10a my next step? Because I do not understand what I am supposed to put there:

"Include on line 10a the smallest of (a) the basis of your nondepreciable property, (b) the amount of the
nonbusiness debt included on line 2, or (c) the excess of the aggregate bases of the property and the amount of
money you held immediately after the discharge over your aggregate liabilities immediately after the discharge"

What number am I supposed to put there? The cancelled debt was $9,332. My amount of insolvency was $72,873.47 due to the high amount of education debt that I have in my liabilities.

I do not have a driver's license so I have no vehicle and, due to low-income, I live with my mother in her rental home and the house/utilities are all in her name so my FMV of my assets is really low. I was able to get my bank statement info from the day before the 12/6/2016 correction on the 1099-C

I apologize is my post is a rambling mess. I Just want to make sure that I provide all info that I think is helpful and will gladly clarify any part of my post that does not make sense.

The reason why I feel like that I did something wrong is because when I filled out Lines 1b and 2, the software was saying that I still owed taxes on the cancelled debt. So I feel like I must be missing something that I need to put on Form 982. Any help would be much appreciated.

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